Thursday, February 7, 2008

Out with the Old Media and in with the New Media?

The death of the newspaper has been a long-heralded event, but until recently it was much more heralded than actually seen. In fact many newspapers were bringing in a 20% profit margin until recently, but the problem for their stocks has been the apparent lack of potential for future growth. It now looks like the death-knell is beginning to fall, and to fall rapidly in terms of ad revenues. This article is an interesting look at the situation:

http://www.nytimes.com/2008/02/07/business/media/07paper.html?_r=1&oref=slogin


We are still in the middle of a huge transition in media - from the old (newspapers, TV, radio) to the new. One question is - why has it taken so long? After all the Internet has been going strong for years.

The shifting situation is reflected in two further articles. The first is a memo to the Wall Street Journal staff, and the second is far more interesting if probably erroneous look at the interaction between Hollywood and new media. Are YouTube and reality TV a real threat to Hollywood? I doubt it, but then again a majority voted for Bush the second time around ... so stupid can sell a lot:

http://online.wsj.com/public/article/SB120234843822049385.html

http://www.vanityfair.com/culture/features/2008/03/wolff200803


2 comments:

Dmitriy Aristov said...

One of the biggest reasons for the slow shift from old to new media seems to have a lot to do with lifestyle and preferences. I, for example cannot read books online though they have been available longer than many other non-text based services. Personal lifestyle and choices drive this change as the consumption of new technologies varies.
Youtube and other websites are fads that will go away, even though they are strong sellers now. Though donwloading of movies is another story as it brings an ease of use, bigger choice, and convenience.

This might be obvious but looking back we can see that the transition from old technology to new is marked by the survival of the fittest. By fit I mean quality, convenience, reliability, and to some degree style. It requires many failures before something worthwhile comes out. Example: my uncle worked on DVR recorders before TiVo came out. His company failed but contributed largely to the development of a much more streamlined/cheaper version: TiVo. Because of this not everyone buys into the newest gadgets, as their old ones serve their current lifestyle just fine. When your lifestyle changes so do your demands for gadgets, rarely its the other way around. Thus seemingly those that fall for the ads are those that purchase the gadgets, artificially driving their popularity and sales.

In conclusion, my point here is that older technology is usually proven to work better and fit people's lifestyles better than many of those that are new and upcoming. Though potential ad growth is seen in many of new technologies that ad growth equals the growth of the product itself and its usually high failure rate. It takes a long time because of survival of the fittest technology and advertisement behavior just tags along.

Michael D. said...

Are newspapers dead? Yes and no. YES, in that the customary distibution method is being challenged by new technologies, but NO, in that professionally produced content always wins the day. The biggest challenge for newspapers is to more quickly and creatively embrace new modes of distribution while not cutting their editorial to the bone of mediocrity.

Consumers demand instant access to information and while the feel of the daily newspaper may have its benefits, most information in it is already old by the time it gets slipped out of its plastic protective sheet and on to my kitchen table. More traditional media will continually confront this challenge - how to grow new revenues when those revenues cannibalize core business?

I, for one, am a good target for the publications industry. Why? I just bought the Amazon Kindle. I've had it for 3 weeks now and the subscriptions I cancelled several years ago (WSJ, NYT, Forbes, Fortune) are all now being delivered to me wirelessly. You know what? I'm reading more as a result. Just a little hint for the newspaper business.....